Is trading with Europe practical for a small company?

[M Underwood]

I have run my own UK based Ltd company for 25 years but have never been asked to export anything.

Recently I started making vintage go kart parts which was a hobby that has now turned into its own small business.

I am receiving more and more enquiries for the parts from Europe, however it seems quite tricky to export them and I notice quite a few online shops wont take orders for Europe with a value of £150.00.

The parts are sold to private individuals and have a value of £100-£200 on average.

I have also read that if the parts are manufactured in the UK there would be no import duties to pay for the customer but I am not sure if this is true?

Is it practical for a small business to export to Europe occasionally?

Are there any services that reduce the Admin etc?

Thanks

 

[japancool]

I have also read that if the parts are manufactured in the UK there would be no import duties to pay for the customer but I am not sure if this is true?

It's true, more or less, but there will still be import VAT to pay. You may be able to get around that by using IOSS or using DDP, depending on the value of your order.

 

[Justin Smith]

We send stuff abroad but only every few weeks because the cost of carriage puts off customers. plus they need a customised quote for it so they cannot just order it online first. This puts a lot of people off.
For us it's a load of hassle and only worth it for bigger orders and/or if business is slack and therefore the opportunity cost of ones time is low.

* We cannot just use our normal carrier, we need to get a specialised quote, normally we use World Options or Royal Mail for smaller stuff, but for the latter we then have to make a trip to the post office to drop it off ! Plus there are all the customs forms to fill in etc.
As I said we often wonder if it's worth it....

 

[M Underwood]

We send stuff abroad but only every few weeks because the cost of carriage puts off customers. plus they need a customised quote for it so they cannot just order it online first. This puts a lot of people off.
For us it's a load of hassle and only worth it for bigger orders and/or if business is slack and therefore the opportunity cost of ones time is low.

* We cannot just use our normal carrier, we need to get a specialised quote, normally we use World Options or Royal Mail for smaller stuff, but for the latter we then have to make a trip to the post office to drop it off ! Plus there are all the customs forms to fill in etc.
As I said we often wonder if it's worth it....

Thanks

That's my thinking at the moment that its probably not worth the hassle.

Its a shame as there is a guy in America who sends similar items to Europe without any problems!

 

[DontAsk]

I do it regularly through the post. Customers order online, OpenCart calculates the postage and I just book a collection from Royal Mail, exactly as I would for any UK order. Being UK VAT registered they get VAT free prices but will need to pay their own VAT and handling fee. It doesn't seem to put people off.

 

[cjd]

We used to send hardware abroad but since Brexit don't anymore - it's now too difficult and expensive. We tell people to buy their stuff locally and we'll set it up for them.

If you're going to do it, you need to have big enough sales - and margin - to make it financially viable.

 

[DontAsk]

If you're going to do it, you need to have big enough sales - and margin - to make it financially viable.

Not necessarily. Clinton would say I have a job, not a business. I doubt it meets your "big enough" criteria. How big exactly do you consider to be big enough?

My customers pay their own VAT and handling fee. They pay the same postage that they would pay anyway. It costs me nothing extra, and I make the same margin, compared to a UK or ROW sale.

I've recently setup a DHL account and can now use DHL GlobalMail which is considerably cheaper than RM for a similar service (may depend on the deal you get with DHL but that's another story). GlobalMail has a DDP option but I haven't really investigated or worked out the best way to integrate it yet.

 

[cjd]

Not necessarily. Clinton would say I have a job, not a business. I doubt it meets your "big enough" criteria. How big exactly do you consider to be big enough?

My customers pay their own VAT and handling fee. They pay the same postage that they would pay anyway. It costs me nothing extra, and I make the same margin, compared to a UK or ROW sale.

I've recently setup a DHL account and can now use DHL GlobalMail which is considerably cheaper than RM for a similar service (may depend on the deal you get with DHL but that's another story). GlobalMail has a DDP option but I haven't really investigated or worked out the best way to integrate it yet.

Look, if you can do it at a profit, then do it.

For us, doing it at a profit meant a price far higher than anyone sensible wouldn't want to pay - routers, adapters and phones are available much cheaper in country. It was also a pile of bureaucracy that wasn't worth the candle for us. Your business may be different.

 

[Customs Geek]

It’s a shame as there is a guy in America who sends similar items to Europe without any problems!

The customs procedures to get goods into the EU are exactly the same as it is from the UK.
It’s just that the USA are used to operating that way whereas we didn’t need to bother with customs borders when we were in the EU.
As others have said you need to see how it could work for your business and goods.

 

[UKSBD]

Another thing to bear in mind is insurance.
Does your policy cover you for exporting to outside the UK?

 

[japancool]

The US has its own special problems.

 

[DefinitelyMaybeUK]

That's my thinking at the moment that its probably not worth the hassle.

£100-£200 orders would sound like they're worth pursuing - as @DontAsk says, it's really no more extra work once you've done some minimal ground work (electronic goods aside!). Just make sure your customer knows they'll be charged a handling fee and their normal VAT, plus duties if over €150 in goods (excludes shipping). As mentioned, if you're VAT registered (so your export vat becomes 0%), all the better, as your prices can become on par with any in-country prices.

If the parts are small enough, use Royal Mail Click & Drop online as that will complete the required electronic customs for you - you'll need to find a suitable go kart part hscode but in reality you'll likely get away with just one for everything.

Beware though, that different EU country post services have a wide swing of handling fees and can increase if the total goods cost exceed the €150 limit as duties need adding (Belgium is worst offender on this front). You may be better off (or need to for bigger items) to use a courier - courier brokers like interpacel/parcel2go will generally offer a choice of rates from popular couriers (dhl/ups/parcelforce/fedex etc) and will pick up from you - the courier handling fees in EU countries tend to be consistent (i.e €10-€20 depending on value/company). WorldOptions was mentioned, and they can do some rates that can't even be matched through our own direct account - you may need to "shop around" for the first few orders. Good luck.

 

[Justin Smith]

Not necessarily. Clinton would say I have a job, not a business. I doubt it meets your "big enough" criteria. How big exactly do you consider to be big enough?

My customers pay their own VAT and handling fee. They pay the same postage that they would pay anyway. It costs me nothing extra, and I make the same margin, compared to a UK or ROW sale.

I've recently setup a DHL account and can now use DHL GlobalMail which is considerably cheaper than RM for a similar service (may depend on the deal you get with DHL but that's another story). GlobalMail has a DDP option but I haven't really investigated or worked out the best way to integrate it yet.

I assume you don't mean as they'd pay [the same] if they were ordering it from within this country (or ordering it from another supplier in their own country) ?
Sending stuff abroad is FAR more expensive then sending it within this country. We had a guy just last month who had to pay £88 carriage for us to send an aerial to the USA, whereas in this country it'd have been £10....
Even to Ireland the carriage would have been £40 odd, so he cancelled and we lost the cost of the fee which always annoys me as there are multiple warnings on the site saying non UK orders ALWAYS incur a carriage surcharge, please phone for a quote BEFORE ordering....
Part of this is because our manual invoicing system always charges the VAT and it is not worth changing it for a relatively small number of orders. I don't think 20% cheaper would make a huge difference TBH but it would complicate my accounts.

 

[Justin Smith]

it's really no more extra work once you've done some minimal ground work.

I don't agree with that at all !
For a UK order, once it's packed, putting it on our regular carrier's system takes about 2 minutes, or even less, we then put it on the pile of the other orders for the carrier and that's that.
Just getting the quote (for a non UK order) takes longer than that ! Then you have to E Mail them back and wait for them to pay the surcharge (if they do, many don't bother so that's wasted time), then put it on the international carriers system which on its own takes far longer, including as it does, customs codes and crap like that, plus you need to print out a commercial invoice (or is it three ! ) and additionally put that on the consignment. Then segregate the order and wait for the international carrier to come and pick it up.
To be fair we have relatively few issues once the orders have left here (excluding when they first bought in all the post Brexit rules, that was a nightmare...), but if we do have an issue we are in a weak position and it costs us a lot of money. Once we accidentally put the wrong address on a customers order to the USA (we used his billing address...) and it cost us $50 to have it forwarded to another state in America.... We'd have still had to pay in this country but it would have cost about a quarter of that. Nightmare.

 

[AlanJ1]

Just getting the quote (for a non UK order) takes longer than that ! Then you have to E Mail them back and wait for them to pay the surcharge (if they do, many don't bother so that's wasted time),

Set rates before-hand?

then put it on the international carriers system which on its own takes far longer, including as it does

Set something up like Shipstation that will do all of this for you, integrates from wherever your order comes from into Shipstation and you just press print.

Then segregate the order and wait for the international carrier to come and pick it up.

This sounds like you are just writing things for the sake of it, this takes what, all of 2 seconds?

 

[Justin Smith]

Set rates before-hand?

Set something up like Shipstation that will do all of this for you, integrates from wherever your order comes from into Shipstation and you just press print.

This sounds like you are just writing things for the sake of it, this takes what, all of 2 seconds?

>>Set rates before-hand?<<

That's impossible for a few reasons. Not only is there an almost limitless variation in size and weight of our orders, but when we have done as you say for the more common orders we have found the rates kept changing anyway !

>>Set something up like Shipstation that will do all of this for you, integrates from wherever your order comes from into Shipstation and you just press print.<<

You mean change our whole invoicing system ? It's not practical, certainly not worth it, as I mentioned in the thread about NI orders :
We only send a relatively small number of orders out with a relatively high margin. We simply print out the Woocommerce orders then write out an invoice manually, which we have to do for phoned through orders anyway. The orders could end up being sent a number of different ways according to the order (of which there are an almost infinite number of sizes / weight combinations), then enter the info on the relevant carriers online portals for them to pick up. I do not see how that could be easily automated (particularly as we have to write out the phone orders anyway), and even if it could the complication of changing our whole system just to make NI orders easier would not be worth it.

>>This sounds like you are just writing things for the sake of it, this takes what, all of 2 seconds?<<

It takes a few seconds to put it there, but we must remember to keep it segregated from all our other orders, and we sometimes have to wait days for the International carrier to pick it up. It's yet more p1ssing about.

 

[DontAsk]

I assume you don't mean as they'd pay [the same] if they were ordering it from within this country (or ordering it from another supplier in their own country) ?

For the item, yes. I have already stated they will pay a handling fee.

Sending stuff abroad is FAR more expensive then sending it within this country.

Not in many cases. Recent example: UK small parcel 1st class £4.09: EU small parcel £5.55 for 250 g. DHL Global Mail £6.73

I don't call those rate FAR mor expensive.

We had a guy just last month who had to pay £88 carriage for us to send an aerial to the USA, whereas in this country it'd have been £10....

Every objection you come up with is specific to YOUR business and the items YOU sell. My original comment was merely to question your statement:

"If you're going to do it, you need to have big enough sales - and margin - to make it financially viable."

as to what you consider to be "big enough".

I was also clear I was talking about using the postal system.

In the general case a business does NOT have to be big to trade with Europe (or anywhere). Margins are NOT affected.

Insurance is an important consideration, as mentioned earlier, especially if shipping to the US.

 

[Justin Smith]

For the item, yes. I have already stated they will pay a handling fee.
Not in many cases. Recent example: UK small parcel 1st class £4.09: EU small parcel £5.55 for 250 g. DHL Global Mail £6.73
I don't call those rate FAR mor expensive.
Every objection you come up with is specific to YOUR business and the items YOU sell. My original comment was merely to question your statement:
"If you're going to do it, you need to have big enough sales - and margin - to make it financially viable."
as to what you consider to be "big enough".
I was also clear I was talking about using the postal system.
In the general case a business does NOT have to be big to trade with Europe (or anywhere). Margins are NOT affected.
Insurance is an important consideration, as mentioned earlier, especially if shipping to the US.

>>In the general case a business does NOT have to be big to trade with Europe (or anywhere).<<

I agree with that, In fact I said that at the start.
We keep sending stuff abroad because to be frank we are not that busy so the opportunity cost of our time is low. If we were busy I think I'd kick it in the head.

>>Margins are NOT affected.<<

If the customer is prepared to pay the extra then yes I agree with you !
And if one doesn't count the extra time it will take most small businesses.

>>Every objection you come up with is specific to YOUR business and the items YOU sell.<<

I can only talk with confidence about that !

>>Not in many cases [does it cost much more to send stuff abroad than within the UK]. Recent example: UK small parcel 1st class £4.09: EU small parcel £5.55 for 250 g. DHL Global Mail £6.73
I don't call those rate FAR more expensive.<<

Ignoring the DHL quote (which is 65% more expensive) that may well be the case, but I have just checked on our RM International Pricing Calculator and (as an example) got this for a smallish 1Kg package :

INTL Business-NPC-Untracked-PKT at £4.40
But that's untracked and unsigned for, personally I am not happy to send stuff abroad on that basis because if the customer says he hasn't received it I would have to send out another (no mail order business should ever send out any order unsigned for unless they are prepared to cover it if it goes missing).
If one wants tracked or signed for then it's INTL Business-NPC-TrkSgn-PKT at £7.94

RM 48 (which is tracked on delivery) within the UK would be £3.25

 

[DontAsk]

And if one doesn't count the extra time it will take most small businesses.

It's probably less than a minute to enter the extra details on the RM website so that it can generate the CN22 or CN23, regardless of the size of the business.

 

[Justin Smith]

We send stuff abroad but only every few weeks because the cost of carriage puts off customers. plus they need a customised quote for it so they cannot just order it online first. This puts a lot of people off.
For us it's a load of hassle and only worth it for bigger orders and/or if business is slack and therefore the opportunity cost of ones time is low.

* We cannot just use our normal carrier, we need to get a specialised quote, normally we use World Options or Royal Mail for smaller stuff, but for the latter we then have to make a trip to the post office to drop it off ! Plus there are all the customs forms to fill in etc.
As I said we often wonder if it's worth it....

I am afraid I am going to be even more negative about exporting / sending orders abroad.....
Both the last two invoices we have had from "World Options" have been wrong. The carriers have added additional surcharges on.
One, from FedEx, was a "Demand Surcharge", what the effin' hell is that ? But whatever it is they cannot be adding on a surcharge once they have already quoted for the job and you have accepted it and sent the goods ! More time wasted querying it....
This is not uncommon, we have had it where the carriers have charged a different (i.e increased) fuel surcharge over and above that quoted when the item was actually booked on !
The latest order we sent, to Australia (the guy paid £68 carriage for a £22 order...) really was not worth bothering with. Don't forget our profit was on the item, and I am sure you can work out for yourself the profit on a £22 item is not that high, about £8..... And we accidentally got charged twice for it (due to a TNT invoicing issue) then had to dispute it, all for a poxy eight effin' pounds ! ! !

 

[DontAsk]

I don't have any of those problems with Royal Mail.

Why on earth would anyone pay £68 to have something worth £22 shipped to Australia? WHat was the weight?

DHL do have some interesting surcharges (like delivery to a "remote" location) but they are all up-front.

 

[Justin Smith]

Why on earth would anyone pay £68 to have something worth £22 shipped to Australia? What was the weight?

It only weighed 0.7Kg, but was too big to go RM !